IRVINE, CA—The capital markets are anticipated to remain highly competitive, with even more capital being allocated to commercial real estate, JLL SVP Zane Sweet tells GlobeSt.com. The debt-and-equity veteran, who recently joined the firm, sat down with us for an exclusive interview about his new role with JLL, the biggest challenges in debt and equity today and emerging trends in the category.
GlobeSt.com: What are your goals in your new role with JLL?
Sweet: My initial focus will be to clearly communicate the JLL value-add proposition to clients who are seeking capital for commercial real estate investment and development opportunities. The JLL global platform is a corporate culture based on collaboration, integrity and placing the needs of the client first. The full spectrum of real estate services—investment management, capital markets, leasing, property management, corporate finance and many others—all benefit our clients and allow us to provide an unrivaled level of service by leveraging other disciplines.
GlobeSt.com: What are the biggest challenges in debt-and-equity placement today?
Sweet: There is a tremendous amount of capital available in the marketplace pursuing commercial real estate investment and development opportunities. The result has been an increasingly competitive environment when bidding for quality assets in primary and even secondary markets, translating to lower risk-adjusted project-level returns in most cases. At JLL, we advise our clients from transaction inception to optimize the capitalization structure and maximize value. We provide our clients the ability to compete more effectively in the current marketplace. We specialize in identifying potential joint-venture capital partners with similar investment objectives to that of our clients, creating an alignment of interests and establishing the opportunity for a long-term working relationship. Similarly, from the debt perspective, our advisors are among the best in the business—our track record of success and our list of corporate clientele speak volumes about our ability to provide best-in-class financing solutions.
GlobeSt.com: What emerging trends are you noticing in this category?
Sweet: According to Real Capital Analytics, total CRE transaction volume is down slightly from Q1 to Q2. However, cap rates continue to compress despite the likelihood of our first Fed funds rate increase in nearly seven years. We are in the sixth year of the recovery, and the sentiment seems to be that this cycle is going to continue. We anticipate for the capital markets to remain highly competitive, with even more capital being allocated to commercial real estate.
GlobeSt.com: What else should our readers know about debt-and-equity placement?
Sweet: Clients need to align themselves with an advisor who can help them navigate the complexities of the capital markets. There are new funds and strategies being born regularly, clients need an experienced advisor from a reputable platform who can help them effectively articulate their opportunity to potential investors. The transactions we are working on today are larger in size and more complicated than ever before and oftentimes require a collaborative effort in order to secure an optimal capitalization structure that will maximize results for our clients.
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